Consider the following three market baskets:

If baskets A and B are on the same indifference curve and if indifference curves exhibit diminishing MRS:
A) C is preferred to both A and B.
B) A and B are both preferred to C.
C) C is on the same indifference curve as A and B.
D) There is not enough information to determine preferences for C relative to the other goods.

Question

Consider the following three market baskets:

If baskets A and B are on the same indifference curve and if indifference curves exhibit diminishing MRS:
A) C is preferred to both A and B. 
B) A and B are both preferred to C. 
C) C is on the same indifference curve as A and B. 
D) There is not enough information to determine preferences for C relative to the other goods.

Quizplus · Accepted Answer

The Answer of Consider the following three market baskets:

If baskets A and B are on the same indifference curve and if indifference curves exhibit diminishing MRS:
A) C is preferred to both A and B. 
B) A and B are both preferred to C. 
C) C is on the same indifference curve as A and B. 
D) There is not enough information to determine preferences for C relative to the other goods.

Consider the Following Three Market Baskets